Prague is catching up with West European real estate markets, the daily e15 reports, citing a new survey released by PriceWaterhouseCooper and the Urban Land Institute, carried out among developers and investors. According to the 2019 report, Prague is one of the 20 most sought after cities in Europe for real estate purchases.
The annual report, called Emerging Trends in Real Estate, provides an outlook on real estate finance and capital markets, as well as other real estate issues throughout Europe and reflects the view of nearly 1,000 interviewees, including industry experts, developers, and brokers.
According to PwC, investors on the real estate market focus mainly on searching for safe investments that would yield stable income. Due to the high prices of real estate, revenues in Prague and other attractive European locations remain relatively low.
Nevertheless, Prague occupies 17th place in the overall ranking, ahead of Zurich, Stockholm or Milan. In the Central and Eastern European region, Prague has claimed number one position, followed by Warsaw, Budapest and Moscow.
At the moment, prime high street retail in Prague yields have come in to 3.5 percent, while office yields have hardened to 5 percent or less.
The PwC report quotes a central European investor who describes the Czech capital as a “solid, major market” where “prices are high and yields are low”. Another interviewee says that “people are beginning to think about Prague not too dissimilarly from Western European markets.”
According to PwC, some potential investors in Prague real estate have been discouraged by the movement in cap rates but to others pricing still appears reasonable compared with core property in other European capitals:
“I think Warsaw and Prague are markets where people with a fresh mind and no preconceptions can imagine a 4 percent yield,” says one of the respondents of the PwC survey.
The Portuguese capital Lisbon placed top of the overall rankings, moving up ten places on the latter since last year. The top ten spots are traditionally dominated by German cities, including Berlin, Frankfurt and Hamburg.
Worked out by the CzechTrade Office Stockholm.
Using the source: Radio Praha, Ruth Fraňková.